New Word on Private Road Maintenance Agreement

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Frederick, Mar 14, 2008.

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  1. Frederick

    Frederick Senior Member

    0
    Nov 2, 2005
    Professional Status:
    Certified General Appraiser
    State:
    New Jersey
    The answer to an often asked question:

    https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0801.pdf

    As per Announcement 08-01 January 31, 2008

    "If the property is located on a community-owned or privately-owned and maintained street, Fannie Mae will now require one of the following:
    1. An adequate, legally enforceable agreement or covenant for maintenance of the street. The agreement or covenant should include the following provisions and be recorded in the land records of the appropriate jurisdiction:
    o Responsibility for payment of repairs, including each party’s representative share;
    o Default remedies in the event a party to the agreement or covenant fails to comply with his or her obligations; and
    o The effective term of the agreement or covenant, which in most cases should be perpetual and binding on any future owners.
    If the property is located within a state that has statutory provisions that define the responsibilities of property owners for the maintenance and repair of a private street, no separate agreement or covenant is required.
    2. If the property is not located in a state that imposes statutory requirements for maintenance, and either there is no agreement or covenant for maintenance of the street, or an agreement or covenant exists but does not meet the requirements listed above, the lender must indemnify Fannie Mae for any losses or expenses it may incur due to the physical condition of the street or in order to establish and/or retain access thereto .
    The property must continue to meet all other requirements, including any requirements related to adequate vehicular access, as outlined in the Selling Guide."
     
    Last edited: Mar 14, 2008
  2. Ted Martin

    Ted Martin Senior Member

    0
    Jan 17, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Kansas
    It's about time.

    I've been hammered for years when I bring this subject up in an appraisal, I now have written support.
     
  3. Marcia Langley

    Marcia Langley Senior Member

    0
    Aug 26, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Missouri
    Yes, that clarity was a long time comming.

    I guess when Fannie actually has to take posession, there is more concern about the details.
     
  4. CANative

    CANative Elite Member

    26
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    California is "a state that has statutory provisions that define the responsibilities of property owners for the maintenance and repair of a private street." It's in the Civil Code. The remedy for stubborn property owners is litigation.
     
  5. Midwest Guy

    Midwest Guy Senior Member

    0
    Dec 12, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    Missouri
    This was the help I was looking for!!! :new_smile-l:
     
  6. Mary Tiernan

    Mary Tiernan Senior Member

    0
    Dec 16, 2003
    Professional Status:
    Retired Appraiser
    State:
    Michigan
    Ok, in my area property owners often have handshake agreements, and I clearly explain such in the report.

    It is not my responsibility to get the homeowner to get an agreement now, is it? Are these underwriters' instructions or appraiser's instructions?
     
  7. Couch Potato

    Couch Potato Elite Member

    0
    Mar 15, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    For quite some time the selling guide has contained the following:
    It is nice that they describe what is meant by adequate agreement, but it is nothing more than what common sense would dictate.
     
  8. BRCJR

    BRCJR Senior Member

    2
    Sep 20, 2005
    Professional Status:
    Licensed Appraiser
    State:
    Virginia

    Take a pic of the property owners shaking hands and pointing toward the private road (tell them to smile!)
    lol-lol-lol
     
  9. Carnivore

    Carnivore Elite Member

    0
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    As far as we are concerned common sense does rule. We state in limitations and certifications of most lender centric assignments that we are not responsible for matters of a legal nature. Thats pretty clear to me.
     
  10. Scott R Marshall

    Scott R Marshall Senior Member

    0
    Dec 14, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    I may be wrong for doing this, but I always give my client a heads-up when I find out there is a private road that they may very well need documentation showing this agreement. While at the appointment, I ask if the homeowner has a copy of the agreement but they very rarely do. As far as I'm concerned, I've done my due diligence.
     
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